Through a combination of deft political action and fortuitous
political circumstance, the beer industry surmounted the tax challenge
in the recent budget package.

Despite this reprieve, many in the industry believe that another
tax challenge is on the horizon, wrapped up in the health care reform
package.

Fortunately, it won't be easy for the Administration to impose
new beer taxes. Mr. Clinton's tenuous mandate makes it unwise for
him to add further tax burdens to the middle class. And, as Beer
Institute president Ray McGrath points out (in an interview included in
this issue) excise taxes are drying up as a source of revenue.
"Additional taxes will result in fewer revenues, not more,"
McGrath notes, "and legislators have to realize that."

Unfortunately, the most compelling argument against linking beer
taxes and health care is one that must remain virtually unspoken: that
beer, consumed moderately, is good for you.

Numerous studies have illustrated the benefits that beer can
provide to the vascular system, by helping to clear arteries and
circumvent heart disease.

In addition, Americans are much more likely to die from heart
disease than cirrhosis. So why tax brewers excessively? Why not tax
producers of the fat-laden foods that give the U.S. the highest heart
disease rates in the world?

Even the Federal regulatory bureaucracy has taken note of
beer's new respectability. In the Bureau of Alcohol, Tobacco &
Firearms (BATF) August 2, 1993 circular, the agency noted, "ATF does recognize that there is currently a growing body of scientific
research and other data that seems to provide evidence that lower levels
of drinking decrease the risk of death from coronary heart
disease."

In the past, the agency has balked at allowing producers to inform
the public as to any potential benefits of alcohol consumption, but the
most recent circular marks a subtle shift in the bureau's position.

In the circular, the ATF said that alcoholic beverage producers can
now disseminate information on the risks and benefits of alcohol
consumption. Specifically, producers can choose to reprint the full text
of an article published by the National Institute on Alcohol Abuse and
Alcoholism (NIAAA) in an advertisement.

The article in question is the NIAAA's effort to present a
balanced discussion of the risks and benefits of alcohol consumption.
ATF notes that any attempts to excerpt the article will be "closely
scrutinized to determine if they present a balanced picture of the risks
associated with alcohol consumption."

Alcohol beverage producers may find it difficult to take advantage
of this new provision, as ATF notes in the circular. "ATF considers
it extremely unlikely that a balanced claim would fit on a normal
alcoholic beverage label."

Despite the qualifications, this development offers the hope that
brewers will one day be allowed to tell the consumer about beer's
substantive contributions to life and health.

The addition of more balanced information to the public debate
would be of great benefit: ending the damaging linkage between beer and
narcotics once and for all, and stopping misplaced attempts to lay the
costs of health care at the door of the American brewing community.

COPYRIGHT 1993 Business Journals, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.